The market had priced in hope. But the crisis was far from over.
For three months, a narrow passage between Iran and Oman held the world's energy supply in suspension — and on Monday, markets dared to imagine it opening again. A US-Iran peace agreement, announced by President Trump despite the shadow of recent Israeli strikes on Beirut, sent Brent crude below $84 a barrel, its lowest since March, as traders began pricing in the return of some 20 million barrels of daily flow through the Strait of Hormuz. Yet history counsels patience: the architecture of peace is rarely as swift as its announcement, and the 60-day negotiating window ahead — covering nuclear terms, sanctions, and the mechanics of maritime passage — reminds us that hope and resolution are seldom the same moment.
- Brent crude fell 4% on Monday as markets seized on the US-Iran peace announcement, marking the first real crack in an energy crisis that has gripped the world since the Strait of Hormuz closed in early March.
- The closure had already erased a fifth of global oil supply overnight, forcing a patchwork response: pipeline reroutes, IEA emergency reserve releases, US military dark-tanker operations, and a sharp demand collapse led by China drawing down record stockpiles.
- A 60-day negotiating period now stands between the announcement and any concrete reopening, with nuclear terms, sanctions relief, and oversight mechanisms all unresolved — leaving analysts skeptical that prices can fall much further in the near term.
- Even an optimistic timeline from Rystad Energy places full supply recovery in early 2027, with only 85% of lost volumes restored by October and a summer demand surge threatening to absorb whatever price relief the deal has already delivered.
- Cumulative supply losses could reach nearly 2 billion barrels by year-end — a figure that quietly measures just how deep the wound has been, regardless of how hopeful Monday morning felt.
The oil market woke to a different world on Monday. Brent crude fell below $84 a barrel — a four percent drop — as traders across Asia-Pacific began pricing in the possibility that the Strait of Hormuz might reopen. Since early March, that narrow waterway between Iran and Oman had been effectively closed, cutting off roughly 20 million barrels of daily supply. President Trump announced on Sunday that a US-Iran peace deal was "now complete," even as recent Israeli airstrikes on Beirut had threatened to derail negotiations. The signal to markets was immediate: if the strait reopened, the worst energy shortage in modern history might finally be breaking.
Yet the details remained murky. Iranian officials confirmed a 60-day window lay ahead to negotiate nuclear issues, sanctions relief, and the broader architecture of the agreement. No one knew when the waterway would reopen, or under what conditions. What had made the crisis survivable at all was a combination of desperation and improvisation: Gulf producers rerouted millions of barrels through pipelines, the IEA released emergency reserves at 2.5 million barrels a day, and the US military reportedly moved supply through the strait using unmarked vessels. Meanwhile, demand collapsed — China alone cut imports by roughly 4 million barrels daily, drawing on record stockpiles rather than buying from global markets.
Analysts urged caution. Tony Sycamore of IG noted that nuclear negotiations were notoriously difficult and that prices were unlikely to fall much further in the near term. Rystad Energy offered a sobering timeline: a phased reopening beginning in mid-July, with full recovery stretching into early 2027 and cumulative supply losses approaching 2 billion barrels by year-end. A summer demand surge, arriving just as global inventories sit dangerously low, could easily absorb whatever relief the peace deal has already delivered. Monday's market priced in hope — but the harder work of turning that hope into flowing oil had barely begun.
The oil market woke to a different world on Monday morning. Brent crude had fallen below $84 a barrel—a four percent drop that extended losses from the previous week—as traders across Asia-Pacific began pricing in something that had seemed impossible just days before: the Strait of Hormuz might reopen. For more than three months, since early March, that narrow waterway between Iran and Oman had been effectively closed, choking off roughly 20 million barrels of oil a day from global markets. Now, with word that the United States and Iran had reached a peace deal, the energy crisis that had gripped the world since the war began showed its first real signs of breaking.
President Trump announced on Sunday that the agreement was "now complete," a declaration that arrived despite recent Israeli airstrikes on Beirut that had threatened to derail the delicate negotiations. The announcement sent immediate signals through financial markets: if the strait reopened, if Gulf oil could flow again, the worst shortage in modern energy history might finally be ending. Yet the details remained murky. No one knew exactly when the waterway would reopen, who would oversee safe passage through it, or what conditions might be attached. Iranian officials said a 60-day negotiating window lay ahead to hammer out the broader terms—nuclear issues, sanctions relief, the architecture of the deal itself.
What made this moment remarkable was how the market had actually held up during the crisis. When the strait closed in March, it erased a fifth of the world's oil supply overnight. But the damage had been contained through a combination of desperation and ingenuity. Gulf producers rerouted about 5 million barrels daily through pipelines to alternative export terminals. The U.S. military, according to Trump, had been quietly moving millions more barrels through the strait using unmarked tankers—so-called dark tankers that slipped past detection to transfer cargo to waiting vessels in the Gulf of Oman. The International Energy Agency released emergency reserves at a rate of 2.5 million barrels a day. And demand itself had collapsed: China cut imports by roughly 4 million barrels daily, drawing instead on its record stockpiles and abandoning the aggressive buying that had characterized recent years. Refineries across Asia throttled back production. Globally, demand fell by between 3 and 4 million barrels a day.
Yet the reprieve would be temporary. Tony Sycamore, an analyst at IG, cautioned on Monday that the road ahead was far more complicated than the market's initial euphoria suggested. Nuclear negotiations were notoriously thorny. "It's hard to see crude falling much further from here in the near term," he said. Other analysts warned that even if the strait reopened promptly, the northern hemisphere summer would bring a surge in energy demand just as global inventories sank to dangerous lows. Rystad Energy, a influential consulting firm, sketched out a more sobering timeline: a June peace deal might lead to a phased reopening beginning in mid-July, but full recovery would drag into early 2027. The firm estimated that by October, about 85 percent of lost volumes would be restored. The remainder—chiefly from mature fields in Iraq and Kuwait—would trickle back through January. Even under this relatively optimistic scenario, cumulative supply losses would reach nearly 2 billion barrels by year-end, a staggering figure that underscored how deep the wound had been.
The market had priced in hope on Monday morning. But beneath that hope lay a harder reality: the crisis was far from over, and the negotiations that would determine when and how the strait reopened were only beginning.
Citas Notables
It's hard to see crude falling much further from here in the near term— Tony Sycamore, analyst at IG
Around 85% of lost volumes are expected to be restored by October, with remaining recovery extending into January 2027— Rystad Energy
La Conversación del Hearth Otra perspectiva de la historia
Why did oil prices fall so sharply if the deal isn't even finalized yet?
Because markets trade on expectations, not certainties. The moment there's credible hope that 20 million barrels a day could flow again, traders start repositioning. The price reflects what they think will happen, not what has happened.
But you said the details are unclear. Couldn't the deal fall apart?
Absolutely. That's why analysts are warning the price might not fall much further. The market has already priced in the optimistic scenario. If negotiations stall over nuclear issues or sanctions, we could see prices climb again.
How did the world even survive losing a fifth of its oil supply?
Desperation breeds creativity. Rerouting through pipelines, emergency reserves, military tankers moving oil in the dark, China drawing down its stockpiles instead of buying more. And demand just collapsed—refineries shut down, countries cut consumption. It was painful, but it worked.
So the crisis is over?
Not yet. Even if the strait opens in July, full recovery takes until January 2027. Summer demand will surge. Inventories are dangerously low. The deal is the beginning of the end, not the end itself.
What happens if the negotiations fail?
Then we're back where we started—the strait stays closed, prices spike, and the world scrambles to find oil elsewhere. The market's relief is conditional on a deal holding.